Yesterday we saw the pound climb to a two-week high against the U.S. dollar, boosted by the release of strong U.K. industrial production data. Data released showed that industrial production in the U.K. rose better than expected in August, boosting the outlook for third quarter growth. Industrial production rose 1.0% from a month earlier, beating expectations for a 0.3% increase.
Industrial output rose 1.9% from a year earlier, compared to expectations for a 1.2% increase. Manufacturing production was up 0.5% from a month earlier, however it was down 0.8% on a year-over-year basis. RICS Housing Price Balance came in at 55% from a previous 53%.
We saw the Euro weaken off yesterday after data showing that German industrial production fell at the fastest rate in a year in August. This added to concerns that a slowdown in global growth is spreading to the euro area’s largest economy. German industrial output fell 1.2% from a month earlier, missing forecasts for a 0.2% increase.
The dollar edged higher against some of the major currencies yesterday. Investors began to digest the fact that the Federal Reserve will probably not be raising interest rates this year, although gains were expected to remain limited. The U.S. government sold $21 billion of 10-year notes yesterday, attracting the second-highest overseas demand on record, highlighting the appeal of haven assets in a low-yield world.
GBP:12:00 – BOE MPC Vote Unchanged Expected to stay the same at 8
GBP:12:00 – BOE MPC Vote Hike Expected to stay the same at 1.
GBP:12:00 – BOE Interest Rate Decision Expected to stay the same at 0.5%.
GBP: BOE Monetary Policy Statement